Document SRC-0035
25th Council meeting 2024-08-23, item 10.6.2: Request for approval of the Eikestad Parking Public Private Partnership Feasibility Study (with Annexure 1 feasibility report)
- Retrieved
- 29 October 2026
- Archived copy
- An archived copy is held by the project
- Why it matters
- Council asked to approve feasibility study for a multi-storey parking PPP (build-operate-transfer, ~25 years) in the CBD, subject to final National Treasury views (TVR1) still awaited; MayCo 14 Aug 2024 / Council 23 Aug 2024.
Original document
Claims citing this document
- VerifiedEditor-approved SMEC records a Council s78(4) resolution, which it dates to 2019, that open single-level parking be provided through an internal mechanism and multistorey parking through an external mechanism, with a private company to build, own, operate and transfer the facility to Council after 20 years. The Council item of 23 Aug 2024 lists that decision as Council 26 Feb 2020, item 13.3, and records that on 23 Feb 2022 Council amended it so that open one-level off-street parking would also be provided through an external mechanism unless the internal one was clearly more viable.
- VerifiedEditor-approved SMEC sized a possible Eikestad facility (assuming use of the existing basement) at averages of 285, 319 and 399 bays for 2023 and 402, 502 and 483 bays for 2028 across three methods (2.57% annual growth). In its full report (Rev 2, 9 Jul 2024) the three methods gave additional-bay requirements of 7 to 292 (Method 1), 2 to 314 (Method 2, which SMEC itself calls flawed) and 92 to 300 (Method 3), which SMEC summarised as ranging 'from just 7 additional bays to 314' with an average 'around 148'. It sized the facility at 475-548 bays and proposed 498.
- VerifiedEditor-approved Figure: stage unknown SMEC's full feasibility report (Rev 2, Jul 2024) estimates construction at R99 439 000, a smart parking system at R1 999 141 and fibre at R5 000 (excluding VAT); with consultants' fees (12%) of R12 138 368.83 and services relocation of R1 714 073.56 the 2023 capital cost totals R115 295 583.39 at September 2023 prices, with construction assumed from June 2024 to Nov/Dec 2025. It puts operating cost at R1 246 000 a year (2023) and just over R1.52m in 2026, and maintenance at R469 003.50 a year (2023) and R542 930.18 (2026) in Table 8-4.
- VerifiedEditor-approved A council item of Aug 2024 quotes the earlier parking resolutions: 27 Sep 2017 (item 7.6.1) launched a Municipal Systems Act s78 process for parking in Stellenbosch, Klapmuts and Franschhoek; 28 Mar 2018 (item 7.6.2) moved to s78(3) to explore an external mechanism; and 26 Feb 2020 (35th meeting, item 13.3) decided under s78(4) that single-level parking be provided internally and multistorey parking externally, at Eikestad Mall (portion of Erf 1692 and erven 1969-1976, 6402, 6636) and Techno Park (portion of Erf 13171).
- VerifiedEditor-approved At a special meeting on 23 Feb 2022 (item 8.11.2) Council amended the s78(4) decision so that single-level off-street parking would be provided through an external mechanism unless an internal one was clearly more viable, approved in principle Checkers Complex and Stelmark Centre parking management as interim pilots for up to three years, confirmed the Eikestad multi-level garage as a PPP, and resolved that parking be leased out short-term until the PPP is finalised.
- VerifiedEditor-approved For the 23 Aug 2024 Council meeting, Mayco (14 Aug 2024, item 7.6.2) recommended that Council approve the Eikestad feasibility report and 'the multi-story parking as a Public Private Partnership (PPP)' so that phase 2 could start; after a councillor workshop on 20 Aug 2024 the municipal manager proposed replacement recommendations: in-principle approval of the feasibility study under MFMA s120(6), noting that this 'is not an approval for the development of a parking garage', that a Request for Proposals would come to Council only after National Treasury approval, with an updated TIA, final Heritage Western Cape approval at design stage and a further public participation process.
- VerifiedEditor-approved The Aug 2024 item set an indicative PPP timeline: Request for Proposals by 31 Oct 2024, Treasury view TVR IIB by 29 Nov 2024, negotiations and PPP agreement by 28 Feb 2025, TVR III by 7 Mar 2025 and a final Council resolution by 31 Mar 2025, followed by contract signature, contract management and construction.
- VerifiedEditor-approved In the Aug 2024 item the Infrastructure Services directorate stated that the CBD 'has a critical shortage of parking', that complaints are received daily, and that the shortage was 'created by historical planning dispensations where the parking requirements for developments in the CBD were relaxed'; it reported that National Treasury's final views (TVR1) were still awaited.
- VerifiedEditor-approved Figure: stage unknown The feasibility report annexed to the Aug 2024 item states that the municipality currently earns 'about R70 000 revenue per month' from the Eikestad parking area but must pay staff on site, making it 'a loss-making activity (staff costs are more than revenue)'; it adds that the municipality cannot fund the R115.2m (2023) facility, about 23% of its R505m 2023/24 capital budget, and 'does not favour managing parking areas directly'.
- VerifiedEditor-approved The Young Urbanists' petition update of 22 Aug 2024 said a 727-page report recommending approval of the Eikestad multistorey garage had been added to the agenda of the 23 Aug 2024 Council meeting, argued that a full Heritage Impact Assessment and independent review had not been done and that the garage contradicts the municipality's SDF 2019, CITP 2022-2026 and NMT Master Plan 2020, said the report "dismisses the objections" raised by the Stellenbosch Interest Group, Young Urbanists, Active Mobility Forum, Stellenbosch Fietsry, Stellenbosch Ratepayers Association and others, and said that "over 3,000 signatures" (the petitioners' own count) and "countless objections" had been ignored. The council item (23 Aug 2024) said comments from the public "have been largely addressed" and the Infrastructure directorate said the development "aligns with the approved CITP".
- VerifiedEditor-approved SMEC's full Eikestad feasibility study (Revision 2, 9 Jul 2024, annexed to the Aug 2024 Council item) recommends a user-pays build-own-operate-transfer PPP for a facility of about 498 bays, with a 25-year concession preferred over 20 years; the private party would finance it through a non-recourse special-purpose-vehicle structure modelled at 15% equity and 85% debt (equity 16%, debt 12.75%, WACC 10.31%), with tariffs assumed to rise 8% every two years under Council's tariff policy, increases to be justified annually and approved by Council.
- VerifiedEditor-approved Figure: stage unknown SMEC's reference model for the preferred Scenario 6 (1 923 parked vehicles a day, against 1 169 at the existing Eikestad lot) gives a net present value of R19 973 666 and an IRR of 12.64% over 20 years, or R30 363 253 and 14.62% over 25 years; its base scenario (existing demand) is negative (-R32 728 014 over 20 years), and only Scenarios 3 to 6 are positive. Projected revenue is R16.293m in 2026 and R17.838m in 2027, or R518.5m over 20 years.
- VerifiedEditor-approved Figure: stage unknown SMEC's value-for-money section says the municipality's direct outlays would be about R7.0m for feasibility and advisory services and R1.74m for relocating bulk services; it would gain a building worth R120m (2023 value, R275m if it appreciates with inflation) and parking revenue of about R35.92m a year from 2044 (20-year term) or R37.95m from 2049 (25-year term). A share of the private party's net return of 5% would yield R5.8m over 20 years or R11.3m over 25 years (15%: R17.3m / R33.7m), and SMEC expects a share 'in the vicinity of 5%'.
- VerifiedEditor-approved SMEC reports that peak parking accumulation at the surveyed CBD sites rose 20% from 2020 to 2021 and a further 85% from 2021 to 2023, based on surveys on 15-19 Sep 2020, 22-24 Apr 2021, 18-20 May 2023 (peak) and 11-15 Jul 2023 (off-peak); it says 7 temporary EPWP workers employed at the existing Eikestad lot 'will be absorbed fully by the Municipality'.
- VerifiedEditor-approved In SMEC's risk allocation the heritage risk is allocated to the public sector, and usage (demand) risk 'remains with the private sector', but the public sector 'needs to ensure that the required projects to increase demand and that policing of the illegally parked vehicles is done, to provide the required demand'.
- VerifiedEditor-approved The draft legal due diligence annexed to the feasibility study (Mandatum CC, 8 Jul 2024) says that because the PPP contract is projected to run 20 years, the municipality must follow MFMA section 33. Section 33 applies when a contract will impose financial obligations on the municipality beyond the three years covered by its annual budget. At least 60 days before the council meeting that approves the contract, the municipal manager must publish the draft contract and an information statement for public comment and solicit the views and recommendations of National Treasury, the provincial treasury and the national department responsible for local government. Council must then consider these and adopt a resolution approving the entire contract exactly as it is to be executed. Treasury gives views and recommendations under s33; it does not approve the contract. Under s33(3) such contracts must be available in full to Council and may not be withheld from public scrutiny except as PAIA allows. The report's checklist marks the s120(6) Council decision "In process" and s120(7)/s33 compliance, procurement, tariff-policy and rates by-law changes as "Will be done".
- VerifiedEditor-approved The Aug 2024 documents describe the Eikestad PPP inconsistently: SMEC recommends build-own-operate-transfer (BOOT); the council item calls it build-operate-transfer (BOT) with the facility transferred to the municipality after about 25 years; and the legal due diligence also calls it BOT but says the building accedes to the municipality's land once built and gives 'an estimated period of 20 years'. SMEC's staffing section also describes 1 185 filled posts of 1 996 as 'an effective vacancy rate of 59.3%', which is in fact roughly the fill rate (59.4%; vacancy about 40.6%, calculated from the source figures).
- VerifiedEditor-approved The Aug 2024 item reports that Provincial Treasury commented on value for money, risk transfer, affordability and public participation; that National Treasury's initial comments asked for more on need and options, due diligence, BBBEE, procurement, affordability, value for money and risk transfer; that three workshops were held and further National Treasury comments were awaited; that COGTA had not commented; and that National Treasury requires a Council decision in principle before it formally issues its views and recommendations (TVR1).
- VerifiedEditor-approved The 30 Jul 2025 council item states that 'Provincial and National Treasury had provided approval for the Municipality to proceed to the Request for Proposal stage', and that 'There are no direct financial implications for the Municipality. The ultimate awarded bidder will finance, construct and operate the facility.'
- DisputedEditor-approved
- VerifiedEditor-approved At a Special Council meeting on 23 February 2022 (item 8.11.2, nem con) Stellenbosch Council confirmed that Eikestad multi-level parking would be done through a public-private partnership and resolved that, given the PPP project life cycle, the parking be leased out on a short-term basis until the PPP process is finalised, subject to public comment and a final Council decision.
- VerifiedEditor-approved Figure: stage unknown The Eikestad Parking PPP feasibility study tabled at Council on 23 August 2024 proposed a 498-bay multi-storey build-operate-transfer facility on the Eikestad open parking area, built and run by a private party for about 25 years, with an estimated construction cost of R99.4 million (excl. VAT) and an initial investment that 'may be more than R 124.1 million'; final National Treasury views were still awaited.